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Auditor Report of Permanent Magnets Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of M/s Permanent Magnets Limited ('the Company'), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134 (5) of the Companies Act, 2013 ("the Act")with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in India, including the accounting standards specified under section 133 of the act, read with rule 7 of the companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgment and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the act and the rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal control relevant to the Company's preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Companies directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In the case of the Balance sheet, of the state of affairs of the company as at March 31, 2015;

ii. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

iii. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to Note no. 3 of notes to accounts, which states that the Honorable High Court of Bombay has passed order for Winding up of the company on petition filed by M/s. Savino Del Bene Freight Forwarders (I) Pvt. Ltd., and court has issued direction for appointment of official liquidator in winding up order. The financial statements of the company have been prepared on Going Concern Basis on reasons mentioned in the note no 3.

Our report is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of sub-section (11) of section 143 of the Ac (hereinafter to as the 'Order), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

As required by section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of written representations received from the directors as on March 31, 2015 under section 164(2) of the Companies Act, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31 2015, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956, provisions of which are consistent with those under section 164(2) of the Companies Act, 2013.

f. The going concern matter described in the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigation on its financial position in its financial statement.

ii. The company has made provision, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long term contracts including derivative contracts. The company neither entered into any derivative contract during the year nor have any outstanding derivative contract at the year-end.

iii. The provisions relating to transferring any amounts to the Investor Education and Protection Fund is not applicable to the Company during the year.

ADDITIONAL INFORMATION ANNEXED TO THE INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under "Report on Other Legal and Regulatory Requirements" section of our report of even date

1. In respect of its Fixed Assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. The fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its Inventories:

a. As explained to us, inventories, except goods in transit, have been physically verified by the management at regular intervals during the year.

b. In our opinion and as per the information and explanations given to us, procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c. The Company is maintaining proper records of inventories. In our opinion, discrepancies noticed on physical verification of inventory were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013:

a. As per the information and explanation given to us, the Company has not granted loans to Companies, Firms or Other Parties covered in the register maintained under section 189 of the Companies Act 2013.

b. As per the information and explanation given to us, the Company not has taken loans from parties which are covered in the registered maintained under section 189 of the Companies Act 2013

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of audit, no major weakness has been noticed in the internal controls.

5. According to information and explanations give to us, the company has not accepted any deposits from the public.

6. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 read with Companies (Cost Records and Audit) Amendment Rules, 2014 prescribed by the Central Government under Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7. In respect of statutory dues:

a. According to the records of the company, undisputed statutory dues including Provident fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2015 for a period of more than six months from the date of becoming payable, except the following:

Nature of Dues Amount (Rs. in Lakhs) Due Date

Income Tax 0.54 30th Oct, 2007

Income Tax 16.02 19th March, 2012

Sales Tax 0.73 28th March, 2014

WCT TDS 0.28 21st September,2014

Service tax 3.60 5th October, 2014

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Nature of Dues Amount (Rs. in Lakhs) Period to which the Forum where dispute is amount relates pending

Excise Duty 63.18 F.Y. 2003-04 CESTAT – Mumbai

Income Tax 02.06 F.Y. 2006-07 CIT (A) – Mumbai

c. The amount required to be transferred to Investor Education and Protection fund, if any has been transferred with the stipulated time in accordance with the provisions of the Companies Act, 1956 and rules made thereunder.

8. The accumulated loss of the Company at the end of the year is Rs. 78,94,680/- which is less than fifth percent of the net worth of the Company. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

9. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to Financial Institutions or Banks, except following payments:

Bank Nature Amount (Rs. in Lakhs) Due on Paid on

ICICI Bank Central Excise Loan 215.53 Between October 2002 Not Paid (including interest) to October 2004

10. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

11. The company has applied funds from term loans raised during the year only for the purpose for which those term loans were raised.

12. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Jayesh Sanghrajka & Co. LLP

Chartered Accountants

Firm Reg. No. 104184W/ W100075

Hemant Agrawal

Partner

M. No. 403143

Place: Mumbai

Date: 30th May 2015


Mar 31, 2014

We have audited the accompanying financial statements of PERMANENT MAGNETS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of section 133 of Companies Act, 2013 in terms of general circular 15/2013 dated 13/09/2013 of the Ministry of Corporate Affairs) and in accordance with accounting principal generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014

b. In the case of the Statement of Profit and Loss, of loss for the year ended on that date; and

c. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report) order 2004 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors as on March 31, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Referred to in Paragraph 1 under the heading of "report on other legal and regulatory requirements" of our report of even date

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories, except goods in transit, have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a. As per the information and explanation given to us, the Company has not granted loans to Companies, Firms or Other Parties covered in the register maintained under section 301 of the Companies Act 1956.

b. As per the information and explanation given to us, the Company not has taken loans from parties which are covered in the registered maintained under section 301 of the Companies Act 1956.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and with regards to sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, Transactions aggregating during the year to Rs. 5,00,000/- or more in respect of each party, have been made at prices which appear reasonable as per information available with the company.

6. According to the information and explanations given to us, the Company has not accepted any deposits within the meaning of provisions of section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and Companies (Acceptance of Deposits) Rules, 1975. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

7. In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. According to the records of the company, undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2014 for a period of more than six months from the date of becoming payable, except the following:

Nature of Dues Amount (Rs. in Lakhs) Due Date

Income Tax 00.54 30th Oct, 2007

Income Tax 26.00 19th March, 2012

b. The disputed statutory dues that have not been deposited on account of matters pending before appropriate authorities are as under:

Nature of Dues Amount Period to which Forum where (Rs. in Lakhs) the amount relates dispute is pending

Excise Duty 63.18 F.Y. 2003-04 CESTAT - Mumbai

Income Tax 02.06 F.Y. 2006-07 CIT (A) - Mumbai

10. The accumulated loss of the company as at the end of the year is Rs. 1,10,44,898/- which is less than fifty percent of the net worth of the company. The company does not incurred cash losses during the financial year covered by our audit but incurred cash losses immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the company has not defaulted in repayment of dues to Financial Institutions or Banks, except following payments:

Bank Nature Amount Due on Paid on (Rs. in Lakhs)

ICICI Bank Central Excise Between October Loan with 2002 to interest 208.63 October 2004 Not Paid

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund/nidhi/mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. In our opinion, the company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All these investments have been held by the company in its own name.

15. According to the information and explanation given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. On the basis of the record examined by us, and relying on the overall reconciliation of fund raised from term loan and total fund required for the purpose for which the term loans were obtained, we have to state that the company has, prime facie, applied the term loan for the purpose for which it is obtained. However, one to one nexus between the receipt of funds and utilization of the same is not possible to establish.

17. According to the information and explanation given to us and On the basis of an overall examination of the Balance Sheet of the company, we are of the opinion that there are no funds raised on a short-term basis, which have been used for long term investment.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures. Therefore, the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. During the year, the company has not raised money by public issue. Therefore, the provisions of clause (xx) of paragraph 4 of the Order are not applicable to the Company.

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the Company has been noticed or reported during the year.

For Jayesh Sanghrajka & Co. Chartered Accountants Firm Reg. No. 104184W

Ashish Sheth Partner M. No. 107162

Place: Mumbai Date: 29th May 2014


Mar 31, 2012

1. We have audited the attached Balance Sheet of Permanent Magnets Ltd. as at 31st March 2012, the Statement of Profit and Loss for the year ended on that date and the Cash Flow Statement for the year ended on that date annexed thereto These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards, generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis tor our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account, as required by law, have been kept by the Company, so far as appears from our examination of those books;

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representations received from the Directors as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as directors in terms of clause (g) of sub section (1) of section 274 of the Companies Act 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) in the case of Balance Sheet, of the State of affairs of the Company as at 31st March, 20I2

(ii) in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

(iii) in the case of the Cash Flows Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

Referred to in Paragraph 3 of our report of even date

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a. As per the information and explanation given to us, the Company has not granted loans to any company which is covered in the register maintained under section 301 of the Companies Act, 1956.

b. As per the information and explanation given to us, the Company not has taken loans from parties which are covered in the registered maintained under section 301 of the Companies Act 1956

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control system.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. in our opinion and according to the information and explanations given to us, Transactions aggregating during the year to Rs. 5,00,000/- or more in respect of each party, have been made at prices which appear reasonable as per information available with the company.

6. According to the information and explanations given to us, the Company has not accepted any deposits from the public, Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. In respect of statutory dues:

a. According to the records of the company, undisputed statutory dues including Provident fund. Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the Information and explanations given to us, except following cases, no other undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2012 for a period of more than six months from the date of becoming payable.

Nature Amount Due Date (Rs. in Lacs)

Income Tax 0.54 30th Oct, 2007

Income Tax 31.00 19th April, 2012

b. According to the information and explanations given to us, as on 31.03.2012, there are no disputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, except the following :

Nature of Dues Amount Period to which Forum where (Rs. in the amount relates Dispute is Lakhs) Pending

Excise Duty 63.18 A.Y. 2003-2004 CESTAT - Mumbai

Income Tax 02.06 A.Y. 2007-2008 CIT (A) - Mumbai

10. The Company does not have accumulated loss as at the year end, however it has incurred Cash loss during the financial year covered under audit.

11 Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that except for following, the Company has not defaulted in repayment of dues to financial institutions or banks.

Bank Nature Amount Due on Paid on (Rs. in Lakhs)

ICICI Bank Central 57.50 Between Oct 2002 Not paid Excise Loan to Oct 2004

Central Term Loan 62.50 37.03.2009 Rs. 20 Lakhs Bank of Paid on India 20/04/12 Rs. 42.50 Lakhs Outstanding

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.

14. In our opinion, the company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All these investments have been held by the company in the name of the company.

15. According to the information and explanation given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. On the basis of the record examined by us, and relying on the overall reconciliation of fund raised from term loan and total fund required for the purpose for which the term loans were obtained, we have to state that the company has, prime facie, applied the term loan for the purpose for which it is obtained. However, one to one nexus between the receipt of funds and utilisation of the same is not possible to establish.

17. According to the information and explanation given to us and On the basis of an overall examination of the Balance Sheet of the company, we are of the opinion that there are no funds raised on a short-term basis, which have been used for long term investment

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures. Therefore, the provisions of Clause (xix) of paragraph 4 of the Order are not applicable to the Company.

20. During the year, the company has not raised money by public issue. Therefore, the provisions of Clause (xx) of paragraph 4 of the Order are not applicable to the Company.

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the Company has been noticed or reported during the year.



For Jayesh Sanghrajka & Co. Chartered Accountants

Ashish Sheth M. No. 107162 Partner

Place: Mumbai Date : 30th May, 2012


Mar 31, 2010

We have audited the attached Balance Sheet of Permanent Magnets Ltd. as at 31st March 2010, the Profit and Loss Account for the year ended on that date and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit,

1. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account, as required bylaw, have been kept by the Company, so far as appears from our examination of those books;

c) The Balance Sheet, Profit Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956;

e) In our opinion, and based on information and explanations given to us, none of the directors are disqualified as on 31st March 2010 from being appointed as directors in terms of clause (g)of subsection (1) of section 274 of the Companies Act 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) In so far as it relates to Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010; and

(ii) In so far as it relates to the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

Annexure to Auditors Report Refened to in Paragraph 2 of our report even date

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. As explained to us, the fixed assets have been pnysically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. There was no substantial disposal of fixed asset during the year.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a. The Company has granted loans to three companies which are covered in the register maintained under section 301 of the Companies Act 1956 aggregating to Rs. 158.14 Lakhs in earlier years. The outstanding balance as on 31/03/2010 in Rs. 169.21 Lakhs.

b. Wo interest is charged in case of two parties. In case of one party interest is charged at a rate less than the rate at which the company has borrowed money. The terms and conditions thereof are prima facie prejudicial to the interest of the company.

c. The receipt of principal amount and interest is not regular.

d. No reasonable steps have been taken by the company for recovery of the principal and interest amount

e. As per the information and explanation given to us, the Company has not taken loans from parties which are covered in the register maintained under section 301.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control system.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have beenso entered.

b. Transactions aggregating during the year to Rs. 5,00,000/- or more in respect of each party, have been made at prices which are reasonable having regard to prevailing market prices for such goods and materials available with the Company or prices at which transactions for similar goods have been made with other parties at the relevanttime,

6. During the year the Company has not accepted any deposits from the public. Hence directives issued by the Reserve Bank of India and the provision of sections 53A & 58AA or any other relevant provision of the Act of the Companies Act, 1956 & the rules framed there under are not applicable.

7. In our opinion, the internal audit carried by the indepencent firm of Chartered Accountant, is commensurate with the size of the company and nature of its business.

8. According to the information given to us, the Central government has not prescribed maintenance of cost records under Section 209 (1) (d) of the companies Act, 1956.

9. In respect of statutory dues:

a. According to the information and explanation given to us, during the year the company was regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales tsx. Wealth Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities except the following:

Nature of Dues Amount Due Date Date of Payment

Tax Deducted at Source 2,58,805 07.05.2009 31.07.2009

Tax Deducted at Source 3,58,950 07.06.2009 31.07.2009

Tax Deducted at Source 1,91,341 07.07.2009 31.07.2009

Tax Deducted at Source 1,76,872 07.08.2009 26.10.2009

Tax Deducted at Source 3,19,625 07.09.2009 26.10.2009

Tax Deducted at Source 2,35,233 07.10.2009 26.10.2009

Tax Deducted at Source 2,94,995 07.12.2009 13.01.2010

Tax Deducted at Source 2.86,233 07.01.2010 13.01.2010

Tax Deducted at Source 2,90,532 07.02.2010 25.02.2010

ESIC 3595 21.09.2009 22.09.2009

ESIC 4686 21.01.2010 22.01.2010

ESIC 4876 21.02.2010 09.03.2010

b. As at March 31,2010, there have been no undisputed dues which have not been deposited with the respective authorities in respect of Income Tax, Wealth Tax, Excise Duty and Cess or any other statutory dues for a period of more than six months from the date they became payable except the following:

Nature of Dues Amount (in Rs.) Due Date

Income Tax 53,517 30th October,2007

Fringe Benefit Tax 4,60,247 30th September ,2009

c. According to the information and explanations given to us, as on 31.3.2010, there are no disputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, except the following:

Name of the Statue Nature of Dues Amount Forum

Central Excise Act Excise Duty 63,18,000 CESTAT

Income Tax Act Income Tax 2,05,801 CIT(A)

10. The Company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit or in (he immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that except Central Excise loan of Rs. 71.75 Lakhs excluding interest and penalty) from ICICI Bank payable between October 2002 to October 20O4,the company has not defaulted in repayment of dues to financial institutions or banks.

The Company has not issued any Debentures and hence question of repayment to debenture holders does not arise.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies {Auditors Report) Order 2003 is not applicable to the Company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the CARC are not applicable to the company.

15. According to the information and explanation given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

16. On the basis of the record examined by us, and relying en the overall reconciliation of fund raised from term loan and total fund required for the purpose for which the term loans were obtained, we have to state that the company has, prime facie, applied the term loan for the purpose for which it is obtained. However, one to one nexus between the receipt of funds and utilisation of the same is not possible to establish.

17. On the basis of an overall examination of the Balance Sheet of the company, in our opinion, there are no funds raised on a short-term basis, which have been used for long term purposes and vice versa.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Conpanies Act, 1956.

19. The Company has not issued any debentures.

20. The company has not raised any money through public issues during year hence the disclosure of end use of the money raised through public issue does notarise.

21. In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements lo be materially misstated.

For Jayesh Sanghrajka & Co.

Chartered Accountants

Registration No. 104184W

Sd/-

Ashish Sheth

M.No.107162

Partner

Place: Mumbai

Date : 29th May, 2010



 
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